Question-and-Answer Session
Operator
(Operator instructions) Your first question comes form the line of Noah Poponak [ph].
Noah Poponak
Good morning, everybody.
Patrick Allen
Good morning.
Clay Jones
Good morning.
Noah Poponak
Guys, I wonder if you could elaborate on the delays that we are seeing in government systems. We’ve heard this from a multiple defense companies, and it sounds like everyone's attributing it to timing. Why is it not attributable to the fact that budget authority outlays are down? And can you give us some color exactly what else you’re seeing in there?
Clayton Jones
Well, I think we agree with everybody else. Anytime you go from the transition from one fiscal year to the next and you’re operating under a continuing resolution that in itself stops you form increasing the spending typically -- especially on development programs.
To answer your second question, almost all of the impact of the domestic order rate is from development-type programs, where we’re either trying to get on contract or we’re trying to increase the spending level that normally happens through, let’s say, a year one to year two development cycles. And in most of the cases, where we’re seeing order delay is because either they’re delaying the on-contract time because of budget authority, or whether or not increasing the stem [ph] rate because of lack of budget authority.
I would say, in our case, there is also a proportion of those delays that are coming from international orders as well. And I'm not sure I could put my finger on the phenomena for international orders other than they are just always hard.
I'll give you a good example. We see some growth in India now because of the recent agreements that the United States and India have signed on defense cooperation. But if you know anything about India, patience is certainly a virtue. And so, our ability to forecast when those orders come in are probably difficult at best. And so, I would say proportionate delay are international orders where we see that ebb and flow, and they tend to be lumpy. And then the rest is due to the developmental programs from DOD.
Noah Poponak
That's how far -- I guess, I'm just a little confused if budget authority is down. And you guys have, I think, been a little more willing to admit than others that you expect outlays to decline. Wouldn't you expect to be seeing this slower order activity?
- To read the full transcript on Seeking Alpha, click here »
